The largest ETF in the category is iShares Barclays TIPS Bond Fund (NYSEArca: TIP). It holds $22.4 billion in assets and invests in U.S. Treasury Inflation-Protected Securities. TIP has an average yield to maturity of 1.6%, according to manager BlackRock.
The inflation “break-even rate” is important to watch. It is determined by comparing the yields of regulator government bonds against inflation-protected securities of the same duration, usually 10 years. If inflation averages more than the breakeven rate over the next decade, then investors would be better off owning TIPS than normal Treasury bonds. [Why TIPS ETFs Have Negative Yields]
PIMCO Total Return ETF (NYSEArca: BOND) manager Bill Gross on Friday tweeted that investors should consider TIPS for cheap inflation protection. The firm also oversees the ETF PIMCO 1-5 Year U.S. TIPS Index Fund (NYSEArca: STPZ).
Earlier this year, the U.S. Treasury auctioned TIPS at negative yields. Investors bought the bonds as an inflation hedge. [TIPS ETFs and Negative Yields]
SPDR DB International Government Inflation-Protected Bond ETF
